White House to West End: Investor Insights at the Angel Summit in Dallas

November 13, 2014

2:55 pm

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What do you do when the White House contacts you about holding the first national summit on angel investing? Of course, you choose Dallas to be the host of the prestigious event. That is exactly what Startup Angels decided when they launched Angel Summit.

“Dallas is making a strong effort to grow the startup community. There is a lot of capital, smart talent, and committed people like Trey [Bowles] and Jennifer [Conley] to foster the environment. We felt the Dallas community was a perfect fit to host our first national summit.” says Leslie Jump, CEO and Founder of Startup Angels.

On an unusually cold Wednesday afternoon, the Pre-Angel Summit festivities kicked off at The DEC, to a large standing-room-only crowd. The prelude workshop was aimed at startups wanting to know “Who Are Investors and How Do They Think?” Trey Bowles, beaming with Dallas pride, welcomed the investors and the startups with his charm and magnetic personality as this city embarked on a new frontier.

Bowles stated, “We [DFW area] are continuing forward to be a great hub for startups, evident by having investors from all across the world come here for this Summit.”

The rest of the workshop was dedicated toward insights provided by some big-time investors. This included advice about term sheets, exit strategy, valuations, equity transfers, and a lot of other fancy investing terms. But among all the chatter, three points continued to be repeated. One of the panels offered as part of this workshop featured Bowles as moderator while three VCs offered their opinions and advice.

People.

By far, the number one thing that every investor on the stage mentioned was, “We like to invest in people. Be ready, be prepared, be persistent, be likeable,” according to Aziz Gilani of Mercury Fund. “If I am going to invest in your company, I am going to be investing in you. If I am getting calls at 11 PM on a Saturday from the people I invest in, I am going to have to like you. Like you A LOT,” he added.

Sarah Kunst of Fortis Partners echoed the same sentiments. “You could be brilliant, technically gifted; but if you’re a jerk, I don’t want to be involved with you. Startup success is about executing as a team, and we invest in people as much as we invest in ideas.”

“Team. Team expertise,” said Joel Fontenot of Trailblazer Capital, who runs the VentureSpur accelerator program and is currently invested in over a dozen companies. “Domain expertise from your core founders is very important. If you don’t have that, you are at a severe disadvantage, and thus our money is at a disadvantage. I advise anyone who asks, have good people in your core team that are knowledgeable about the domain you are in.”

The message was loud and clear. Investors are looking to invest in good people who are not only likable but are honest and completely committed to their startup.

Gilani, and the other investors alike, all shared a rawness in their message. This panel was definitely not offered for fluffy, generic funding advice. Gilani added that a lot of companies shouldn’t raise money. “Hold off as long as possible,” he added, because capital should only be raised when it is absolutely necessary – or you have great traction and need that cash to accelerate a milestone.

Persistence.

This message goes hand-in-hand with finding the right people. Persistence is a quality of top-notch people most investors like to deal with. You can be nice and all, but if you aren’t always executing toward your milestones, you probably aren’t the right fit with investors.

“Whatever problem your startup is trying to solve, always be thinking, talking, and pursuing that topic. If it’s indoor farming, or roadside solar paneling, if you are breathing that same message all the time, you will get connected to the right people.” Kunst said pointedly. “When we invest, we are looking for the folks that will do everything it takes to make it happen, listen to feedback aggressively, keep executing.”

“Passion and persistence are key,” Fontenot added. “We commit a lot of money to a lot of ideas. We know all of them, even a lot of them, won’t work due to numerous uncontrollable conditions, and that’s the risk we are taking. One thing that is controllable is the persistence of the founders. The do-whatever-it-takes (legal of course) attitude and the actions are a must.”

Unique Ideas.

The investors were also keen to point out: we are in this to make money. If you are tackling a problem that’s also being pursued by hundreds of other people, it may not be the right market. “We look for unique angles that startups are taking. Can you show that your idea is sellable? Have you been able get someone [non-family] to buy what you’re selling?” asked Fontenot. “Quit worrying about getting a piece of the pie. Focus on building the pie.”

Gilani looks for the same. “Do you have an addressable market? Is it unique? Does it create an unfair advantage with your domain expertise? Hard to replicate? We look at these criteria before we embark on a relationship.”

Addressing the Dallas Ecosystem

Questions were raised about whether Dallas has enough capital investments. It all lead to one answer: Find the customers, build traction, and the investment will follow. “If you can’t find investment, then find your customers. Investors don’t want to hear excuses; they want to hear what you’re doing to build a great company that they would be willing to invest in. I love all that – it’s so raw and simple to digest.” Jennifer Conley, Co-Founder of The DEC, said.

The workshop had a great turnout. There were people from around the DFW community, from young startups to seasoned veterans. People traveled from all over the world: Chicago, San Francisco, London, and even China. “Over 120 people from all the different coworking spaces, accelerator programs, and meetup groups came out for the workshop from across the region.” says Conley. She acknowledges the reality and the optimism around the investor scene. “Dallas certainly has a way to go to keep up with the investments being made in other major cities across the country. On the side of the coin, we don’t just look at investment as the only source of capital. There are 6.5 million people in the Dallas-Fort Worth area, 18 Fortune 500 companies, and 19,000 new businesses created every year in just Dallas alone. North Texas provides entrepreneurs a robust and diverse customer base.”

After all the honest advice, pitches for a jackpot, group-wide rock-paper-scissors game, and networking among the audience, one thing was clear: The Dallas community is putting in all the ground work necessary for a thriving startup and investor community. There was great optimism around the space. With more and more prominent events being held in Dallas, the growth of investment in Dallas is poised to grow.

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Hi, My name is Baiju and I am a technology geek at heart, writer of many things, startup advocate, runner, photographer and living life without regrets. I grew up in NYC and now I call Allen, Texas my home. I am also huge sports fan. I will occasionally mix all of my interests into a giant stew of things.